FAO/GIEWS - Food Outlook No.5 - November 1999 p. 8

CARRYOVER STOCKS

Global cereal stocks higher than anticipated
earlier but still below their opening levels

The forecast for world cereal stocks by the close of the
seasons ending in 2000 has been raised to 331 million tonnes, up 8 million tonnes
from the September report. This latest revision partly reflects upward adjustments
(by 3.4 million tonnes) to the estimates of the cereal carryovers from the previous
season. At the forecast level, world cereal stocks by the close of crop years
ending in 2000 would be nearly 9 million tonnes, or 2.5 percent, below their
opening levels. As a result, the ratio of global cereal carryovers to trend
utilization in 2000/01 is forecast to fall to 17.3 percent from the previous
year's revised level of 18.1 percent, but would remain within the 17 to 18 percent
range which the FAO Secretariat considers as the minimum necessary to safeguard
world food security. However, although global cereal stocks are forecast to
decrease, those held by the major exporting countries, which are the main buffer
against any major production shortfall, are expected

to change little from the previous year, remaining at about 150
million tonnes, and more than double the level in 1995/96 when the last sharp
rise in cereal prices occurred. At this level, the major exporters' share of
total global carryover would be 46 percent compared to just 30 percent in 1995/96.

The forecast for global wheat stocks for national crop years ending
in 2000 has been lowered slightly (by about 1.2 million tonnes) to around 131
million tonnes, down 8 million tonnes, or 6 percent, from their opening levels.
This month's main revision concerns mostly the EC, where the estimates for ending
stocks have been adjusted downward significantly starting from 1997/98, mostly
in view of larger feed use. Elsewhere, smaller stocks are also anticipated in
Asia, North Africa and Europe, mostly as a result of reduced production due
to unfavourable weather conditions.

Global stocks of coarsegrains for crop years ending
in 2000 are forecast at 145 million tonnes, down nearly 3 million tonnes from
their opening levels but 8 million tonnes more than was reported in September.
This month's upward revision mostly reflects a sharp increase in the estimate
for the opening stocks in the EC. Based on the latest data from the European
Commission and trade sources, the estimates for carryovers from the previous
season (i.e. the opening stocks) have been revised upward by as much as 5 million
tonnes. The main reason for this revision appears to be larger use of wheat
for feed instead of coarse grains and, thus, larger stock build-up of the latter,
especially with regard to barley, maize and rye. Similarly, the intervention
stocks in the Community at the start of the current season stood at exceptionally
high levels of around 12 million tonnes, representing nearly 40 percent of total
coarse grain stocks in the EC. However, given the likely decline in 1999 production
and higher exports and feed use, this season's ending stocks in the EC are expected
to be reduced by around 5 million tonnes to 21 million tonnes. This anticipated
decline in the EC carryovers would be partly offset by a likely expansion in
coarse grain inventories held in the United States, where total supply is expected
to be larger than demand during its October to September marketing season. In
addition, given the expectation of yet another good harvest in China, the world's
second largest stock holder, the ending stocks in that country are also forecast
to rise.

WORLD CARRYOVER STOCKS OF CEREALS

Crop year ending in:

1998

1999 estim.

2000 f'cast

(. . . . million tonnes . . . .)

Wheat

136.2

138.9

130.6

Coarse grains

138.7

147.2

144.6

Rice (milled)

54.9

53.7

55.9

TOTAL

329.7

339.8

331.2

of which:

Main exporters

127.7

154.5

152.4

Others

202.1

185.3

178.8

SOURCE: FAO

Rice stocks for the marketing seasons ending in 1999
have been adjusted upward by 700 000 tonnes from the previously reported
level to 53.7 million tonnes. However, global stocks would still be about 1.2
million tonnes below their opening levels due to lower inventories in Japan
and China (Mainland). The forecast for global rice stocks at the end of the
marketing seasons in the year 2000 has been increased by about 1.4 million
tonnes from the previous report to 55.9 million tonnes, mostly reflecting the
prospect of record world production in 1999/2000, which is likely to be above
the expected increase in consumption. Larger stocks are expected in the major
exporting countries including Thailand, Viet Nam, United States and India. Among
the major importing countries, ending stocks are projected to expand in the
Philippines and Brazil.